Showroom Lighting: The Secrets of Winning Over Online Shoppers

Research commissioned by shipping company UPS uncovers which elements of the online shopping experience are most important to consumers.

This past holiday season demonstrated just how popular online shopping has become when prominent shipping companies UPS and FedEx struggled to keep up with the unexpected surge in last-minute Internet orders.

Online retail growth continues to significantly outpace that of overall retail, making a

competitive online shopping experience essential for retailers seeking to capture their share of the thriving e-commerce market. For the past two years, UPS has commissioned research with comScore to discover which elements of the online shopping customer experience drive brand preference, customer loyalty, and recommendations. A portion of the 2013 report’s findings are detailed in this article.

The study analyzed data from a 2013 survey of 3,000+ online shoppers in the USA. All of the consumers surveyed had to meet the criteria of making at least two online purchases in a typical three-month period. Among those surveyed, 41 percent indicated they made 2-3 online purchases, 33 percent

made 4-6 purchases, and 27 percent made 7 or more purchases. In addition, an online focus group was held to gain supplemental qualitative insight about the customer experience. Participants met in a virtual online forum where they were asked about a series of topics related to online shopping and logistics, including shipping and returns preferences.

Key Findings

• Post-Purchase Contact Is Important

While overall online shopping satisfaction is high, there is room for improvement in the post-purchase

packages; and the ability to pick up orders at convenient locations such as retail stores.

• Delivery Needs to be Accurate

When retailers provide the expected delivery date, customers are surprisingly patient and willing to wait an average of one week for their orders. The timely arrival of shipments encourages shoppers to recommend an online retailer. Package tracking services are considered either “essential” or “nice to have” by almost all consumers.

• Improve the Returns Process

Returns continue to be an area of low satisfaction for online shoppers. The number of people who have returned a package in 2013 grew from 2012, just as the number of consumers who view a retailer’s returns policy before or after purchase has.

• Offer anOmni-channel Experience

Retailers must keep pace with the rapid adoption of mobile phones/devices and tailor their offerings to an increasingly mobile consumer while extending the shopping experience across channels. Most

omni-channel shoppers prefer online methods of access to retailers, but they are also looking for a

seamless cross-channel experience. Key elements of that experience include: the ability to shop

online and return to a store; receipt of coupon offers via smartphone when consumers are in

close proximity to the store; and the ability to shop online and pick up in store. Online shoppers

are social; they are highly likely to not only use social media platforms, but actively

engage in seeking out updates and promotions for sites they follow.

How Satisfied Are Online Shoppers?

Consumer satisfaction with online shopping overall is high at 83 percent, and the dynamic that respondents are most satisfied are those related to retailer Web sites. The most important factors are product variety and ease of use, while the area they are least-satisfied with pertains to shipping. Consumers want the ability to control when and where they receive their package, plus they want the option to re-route their package after it has shipped. A green/environmentally friendly shipping option is another area where shoppers are the least satisfied.

How to Boost Referral Business

In addition to retaining satisfied customers and acquiring potential consumers, another way

retailers can increase their business is through customer advocacy and referral. When asked what has

led to a shopper to recommend a particular retailer, the availability of free or discounted

shipping was cited as the top factor, followed by timely arrival of shipments, and free or easy returns.

While cost savings is perhaps a predictable factor in retailer referral, the other leading factors

are less obvious. Not only do consumers value timely delivery and seamless returns, but they are willing to advocate on their behalf should they meet customers’ expectations in this regard.

On the other hand, certain occurrences lead to negative word of mouth. The top factor was shipping costs being too high based on the product, followed by shipping costs being too high based on the expected delivery date, products arriving damaged, and delivery taking longer than promised.

(use chart on TOP part of page 9)

Valued Options

Consumers demonstrated a distinct preference for retailers who deliver an integrated omni-channel experience — both in terms of online/in store working together and availability of mobile shopping features. The single most important factor – cited by 62 percent of respondents – was the ability to buy online and make returns in store. The third most important factor was the availability of in store pickup.

Approximately 47 percent of smartphone owners said they were likely to shop with a retailer who provides location-enabled coupons or promotions to their smartphone, while 41 percent of tablet owners said the availability of a tablet app increased their likelihood of shopping with a particular retailer. More than one-third of shoppers want to be able to purchase in-store with their mobile device and want a mobile app for their smartphone.

“Ship to store” services tend to be viewed by consumers as a means to avoid shipping costs while leading to incremental sales gains for retailers. Approximately 50 percent of all online shoppers have selected “ship to store” at least once and more than one-third (38 percent) said they have purchased other items while in the store, highlighting an incremental sales opportunity for retailers with the availability of this option.

30 percent to more than 130 million owners. Meanwhile tablets emerged as one of the fastest-selling devices in history to reach nearly 50 million users. Tablets have already achieved a level of adoption in three years that it took smartphones nearly a decade to reach from when they were originally introduced.

While smartphones are becoming disruptive to the traditional retail environment through showrooming, tablets are changing shopping behaviors in somewhat different ways. Because their functionality more closely resembles that of computers, tablets are not influencing the in-store shopping experience as much as they are driving in-home shopping behavior. In fact, tablet users were significantly more likely than smartphone owners to engage in various shopping behaviors, such as researching product features and comparing prices. Perhaps most importantly, tablet users were twice as likely to purchase items on their devices (38 percent) than smartphone owners (19 percent).

Also noteworthy is that nearly 7 in 10 online shoppers prefer to access multi-channel retailers via digital channels. Of those who shop on a mobile device, 30 percent prefer to access their favorite retailer via smartphone or tablet. Half of the online shoppers surveyed who use a smartphone (59 percent) make purchases on it, and nearly 60 percent of online shoppers surveyed who use a tablet do so on that device. Given the relatively high buying penetration within these channels – particularly as adoption of devices continues to increase – it has never been more important for retailers to ensure they are at the forefront of mobile commerce strategies.

In addition, a mobile app allows retailers to provide deals and promotions according to the user’s location. Of the nearly 50 percent of shoppers who use location-based deals services, 60 percent would like to receive deals and promotions based on their location and/or transaction history.

Improving apps, particularly in terms of facilitating the browsing and transaction processes, can help retailers reduce friction and improve mobile conversion. With the inclusion of value-added features that leverage what’s unique about the mobile medium – namely location-enabled services – retailers can significantly enhance their customers’ mobile experience.